ministerial statement by hon hage geingob-an update on epa negotiations

8/9/2019 Ministerial Statement by Hon Hage Geingob-An Update on EPA Negotiations

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Ministerial Statement

Hon. Hage Geingob, MPMinister of Trade and Industry

19 May 2010

"An update on the EPAnegotiations"

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Hon.SpeakerHon.Members

I rise to give this House an update on the EconomicPartnership Agreement (or EPA) negotiations with theEuropeanUnion.

Over the past months, a number of importantdevelopments have occurred. It may be recalled that inour SADC negotiating group, four States namelyBotswana, Lesotho, Mozambique and Swaziland signedthe interim EPA(or IEPA)in mid-2009. Angola, Namibiaand SouthAfrica decided not to sign.

Thereafter, the European Commission, or EC, pushed forthe notification of the IEPAto the WorldTradeOrganization(WTO),and its ratification and implementation by thosewho signed. Doing sowould certainly have resulted in theexclusion of Namibia from the current access that wehave into the European market, and very significantly,also probably the break-up of the Southern AfricanCustomsUnion,SACU.

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Despite the serious strains within SACU,the five MemberStatesmade a strong effort to re-unite, and we proposeda way forward that would keep the SACU memberstogether. We decided to call a meeting in early 2010 inSouthAfrica to discussthe matter.

We had agreed that notification, ratification, andimplementation of the interim EPAby those that havesigned should not be prioritized unlessprogress has beenmade in addressing the internal and external unresolvednegotiating issues that still exist which include thealignment of market access tariff offers, rules of originissues,safeguarding the agreements reached during theSwakopmund meeting explaining the remainingunresolved issuesand firm commitment from the ECwithrespect to the inclusion of these solutionsin the final EPA.

We also stressed that we should focus from now on thenegotiation of a final EPA that would include thesafeguards that we seek and which could be supportedby all parties.

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In these efforts we also obtained the support from Angolaand Mozambique, the other two members of the SADCEPAnegotiating group.

Consequently, a letter was sent to the EU to stronglyemphasise that from then on there would be consultation,before, after, and between the meetings. We alsorequested a meeting with the new Commissioner tocontinue with negotiations on the EPAs. To our dismay,this was roundly and condescendingly rejected by thenew European Trade Commissioner (Mr Karel de Gucht,who replaced BaronessCatherine Ashton).

At the recent SACU Summit in Windhoek, we had toregroup and consider our response. We agreed as SACUMembers that we would once again need to carefullyexamine the risks that each Member State faces insigning or not signing. Themeeting at which each statewill put up what they will gain by signing or lose by notsigning, isscheduled for the 18thJune2010in Botswana.

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I do not wish to exaggerate the challenges that we arefacing, but if the five member Statesof SACUcannot finda solution for this problem, it may well spell the end of thecustoms union aswe know it now.

The solution is nevertheless not simply for Namibia toconcede and sign the agreement. We cannot sign anagreement just for the sake of giving in to the demands ofthe other side. Signing holds seriouseconomic and policyconsequences for Namibia.

For example, if we sign, we would have to forfeit thepolicy option of using export taxes on raw materials as animportant incentive for value addition to raw materialsand as a potentially important new source of revenue.

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Thiswe are expected to do at a time when it is a nationalpriority to diversify our sources of revenue to mitigate thedeclining revenues from SACUand tariff liberalization ingeneral. At the same time our constituents aredemanding tougher measures against the exports of rawmaterials.

We would also have to abandon our current system ofinfant industry protection, in favour of a much weakersystem demanded by the EC. This requirement goesdirectly against our efforts to industrialize, and wouldleave several industriesthat are currently benefitting fromsuch protection completely exposed. We may have towave goodbye to our diary and pasta industries.

We would furthermore have to abolish all forms ofquantitative restrictions on imports and exports if we sign.Thiswould risk all our past achievements in horticulturaland cereal production, as you know we depended toomuch on the import of food in the past. ~ cl ~ ~

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Our advances towards food security and ruraldevelopment were made by creating secure markets forour producers, by restricting imports of fruit, vegetablesand cereals.

I fear that all our past investments in the Green Scheme,horticultural marketing, grain storage, agriculturalextension and value addition to food products would belost and we would seriously disrupt rural economies andthe livelihoods of thousands of small farmers. Thisalone isactually reason enough not to sign this agreement. Weshould not be expected by anyone calling themselvesour friends to create such instability in our rural areas!

Thereare other reasonswhich I will not elaborate on now,such as the most favoured nation treatment demandedby the EUat the cost of future South-Southtrade relations;the unacceptable definition of parties that would createconflicts in how we operate in SACUand SADC,and soon. It is for fear of the destabilizing effects that measuressuch as these would have on our economy, that we havenot been able to sign the IEPA.

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Remarkably, for almost all of these problems, we havealready negotiated solutions with the EC,at Swakopmundas a matter of fact. The EC, for reasons known best tothem, have steadfastly refused to properly safeguardthese solutions, either by making amendments to theIEPA,issuinga strong joint declaration, or by guaranteeingtheir inclusion in the final EPA.

Hon.SpeakerHon.MembersWe are currently trading with the EU, and we get thebenefit of duty free, quota free market access, by virtue ofhaving initialled the interim EPA. Thiswas so arranged toenable the EUto meet their obligations under the CotonouAgreement with the ACP countries, namely that "no oneshould be worse off" as the result of the EPAnegotiations.

Some may think that we are "free riding" in the Europeanmarket. This,I absolutely reject. Thecontrary is true.

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Our market is full of European products - let me add,heavily subsidized products, such as long life milk,cheese, butter, chocolate, rice, wheat, wine, beer andother processed agricultural products, imported on termsthat we never agreed to. This is because the EUconcluded a free trade agreement with SouthAfrica, theso-called TOCAor Trade and Development CooperationAgreement in 2004, which Namibia never endorsed, aright which we have in the SACUagreement. EUgoodscross our borders from South Africa because of the freeflow of goods within SACU. It is the EUthat has been free-riding in our market since the TOCAwas concluded.

It was in fact Namibia that insisted that South Africa beincluded in the EPAnegotiations in order to regularize thesituation, to do away with the TOCA,and to bring all SACUmember states back into a single trade agreement withthe EU. Thiswould also ensure the alignment of the TOCAand the SACUtariffs to re-establish a common externaltariff for the customs union.

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We also need to consider the over-arching threat ofpreference erosion. These duty free and quota freemarket access conditions that we are given by the EUmay ultimately not be worth the concessionsthat we haveto give in return. Let us not for one moment believe thatwe are geHing the duty free, quota free access fornothing. Firstwe have to make economic governanceconcessions and secondly we have to open our ownmarket to the EU. In the meanwhile, the EUis negotiatingfree trade agreements with other parts of the worldincluding countries that are able to compete with ourexports, such as the LatinAmerican beef producers andsouthEastAsia.

A further issue that concerns me greatly is that no one,including my counterpart ministersin Europe,can tell mehow long we would have to live with the interim EPA.Willit be one year or two years or much longer? Thisraisesconsiderable uncertainty and could make a world ofdifference to us. This is one aspect that the EuropeanUnion simply must clarify if we were to even considersigning the interimagreement.

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We have played a constructive role throughout thesenegotiations. We have pressed, also through ourdeclaration made at the time of initialling the IEPAthatsolutions must be found for the unresolved issuesin theinterim EPA.

Other negotiating configurations have not signed EPAs,yet we seem to be singled out for rebuke for not doing so.We see this in our media all the time. Isthis perhaps partof the tactics of divide and rule and playing usoff againstour fellow African countries? Bulldozing a membercountry and so-called partner? Surely we should notcondone this.

Hon.SpeakerHon.MembersWe face this predicament for highly artificial reasons. Oursister country Angola, to mention an example, also hasnot signed the interim EPA, but is not under pressure.

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Angola enjoys the Everything-But-Arms market accessgiven by the EUto all LeastDeveloping Countries.

In our case, the European powers and others simplydivided our GOPby our population, and classified us as aMiddle Income Country. Thus by ignoring our dualisticeconomy, and the real prevalence of rural poverty, thisartificial status is now jeopardizing our ability to trade withEurope.

Imagine that an oil producing country such as Angola orNigeria have LDCstatus,while Namibia with a majority ofpoor citizens is required to make seriouseconomic policyconcessions and offer reciprocity in market access inorder to trade with the EU.

Furthermore, I will point out that I had a meeting with mycounterparts from EUand I talked about the classificationof countries. Although it is not part and parcel of thecurrent negotiations about IEPA,I told them that it doeshave a bearing on the country's economic and politicalfortunes.

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Case in point the beef export to the EU. It was a badagreement as it forced Namibia to discriminate againstthe majority population. Privilege of exporting was limitedto 2% of the farmers who live south of the red line. Thus,majority of farmers were left out and majority of the cattlestock was not tapped. Such a situation had the potentialof creating a political crisis in the country

Hon.SpeakerHon.MembersTheway forward remains uncertain. Our officials will meetnext week their counterparts in Brusselsto try to bring thenegotiations back on track, and to get support for thesolutionsthat we have proposed.

Many people speculate whether the ECwill now move toexclude us from their market - even though we are stillnegotiating.

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I will not join in such speculations, but I trust that allconcerned would realize how seriousthe impact of doingso would be on our exporters and our economy - butespecially on our relationswith the EU.Icall on our friends in Europe not to abandon us and towork with ustowards a lasting solution. After all, the EPAisabout partnership towards the shared goals of povertyalleviation and economic development. Let's not usebully tactics or old colonial arrogance. Let's be partnerswho are equal in sovereignty.

Ithank you.

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ministerial statement by hon hage geingob-an update on epa negotiations

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